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(Kitco News) - Comex gold prices are trading modestly higher and hit a fresh two-week high in the early going Wednesday, on some follow-through technical strength from Tuesday’s strong gains that pushed prices back above the key $1,700.00 level. U.S. President Obama’s re-election is also seen as a bullish underlying factor for the precious metals. December gold last traded up $6.20 at $1,721.20 an ounce. Spot gold was last quoted up $3.70 at $1,721.00. December Comex silver last traded down $0.064 at $31.97 an ounce.

The market place early Wednesday is digesting President Obama’s re-election, but focus is quickly turning to other matters. Asian and European stock markets were firmer overnight. The U.S. stock indexes are trading weaker in the early going Wednesday, on a corrective pullback from solid gains scored Tuesday. Many market watchers do reckon that an Obama victory is an underlying bullish factor for raw commodity markets and U.S. Treasuries, given the easy U.S. monetary policy that has been in place for quite some time, and will likely continue under Obama’s second term.

Heading into the end of the year, one major focal point for the market place will be the so-called U.S. fiscal cliff tax and spending issues that the U.S. administration and Congress must address. Look for this matter to be in the news headlines for the next several weeks.

In other overnight news, German industrial output fell more than expected, while Euro zone retail sales also declined in September. European Union officials also said Wednesday that the Greek economy will contract 6% in 2012 and by 4.2% in 2013, which would be six straight years of economic recession. The EU Commission also put Greece’s unemployment rate at near 24% in 2012 and 2013. European market watchers are also looking to a Greek parliamentary vote on fresh austerity measures which is scheduled for Wednesday. The European Central Bank holds its monthly meeting on Thursday. There is a general leadership conference in China starting Thursday, at which time new leaders in China will be selected.

The U.S. dollar index is trading higher Wednesday morning and hit another fresh two-month high. The U.S. dollar bears still have the slight overall near-term technical advantage but the bulls have gained good technical momentum recently. Meantime, Nymex crude oil prices are trading lower Wednesday morning on a corrective pullback from solid gains posted Tuesday. The crude oil bears have the overall near-term technical advantage as a seven-week-old downtrend is in place on the daily bar chart. These two key “outside markets” will continue to have a significant daily influence on gold and silver prices.

U.S. economic data due for release Wednesday includes the weekly MBA mortgage applications survey, consumer credit and the weekly DOE energy stocks report.

The London A.M. gold fixing is $1,730.50 versus the previous A.M. fixing of $1,691.00.

Technically, gold futures bulls are posting a good recovery from last Friday’s big losses. A four-week-old downtrend on the daily bar chart has quickly been negated and the bulls have regained the near-term technical advantage. The gold bulls’ next upside price breakout objective is to produce a close above solid chart resistance at $1,750.00. Bears' next near-term downside price objective is closing prices below solid technical support at last week’s low of $1,672.50. First resistance is seen at the overnight high of $1,733.00 and then at $1,740.00. First support is seen at the overnight low of $1,705.60 and then at $1,700.00.

December silver futures still see a four-week-old downtrend in place on the daily bar chart, but now just barely. Silver bulls’ next upside price breakout objective is closing prices above solid technical resistance at last week’s high of $32.695 an ounce. The next downside price breakout objective for the bears is closing prices below solid technical support at last week’s low of $30.655. First resistance is seen at the overnight high of $32.42 and then at $32.695. Next support is seen at the overnight low of $31.715 and then at $31.535.

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